Instructions For Form 588 - Nonresident Withholding Waiver Request
ADVERTISEMENT
1
2Instructions for Form 588
Nonresident Withholding Waiver Request
General Information
not apply;
California;
• The withholding agent’s total payments of
• Distributions of California source income
California source income to the vendor/
Private Mailbox (PMB)
to nonresident beneficiaries from an estate
payee are $1,500 or less for the calendar
If you lease a mailbox from a private business
or trust;
year;
rather than from the United States Postal
• Prizes and winnings received by nonresi-
• The payments are for income from
Service, enter the box number in the field
dents for contests in California;
intangible personal property, such as
labeled “PMB no.”
• Distributions of California source income
interest and dividends, unless derived in a
to a domestic (nonforeign) nonresident
A Purpose
trade or business or the property has
partner or member. For more information
Use Form 588, Nonresident Withholding
acquired a business situs in California;
get FTB Pub. 1017, Nonresident
Waiver Request, to request a waiver or a
• The payments are for services performed
Withholding — Partnership Guidelines;
reduced withholding rate on payments of
outside of California or for rents, royalties,
• Partnership or Limited Liability Company
California source income to nonresident
and leases on property located outside of
(LLC) income, gain, or (loss) allocable
vendors/payees.
California. If nonresidents occasionally
under the Internal Revenue Code (IRC)
enter California to perform duties
Section 704 to a foreign (non-U.S.)
Do not use Form 588 to request a waiver or
contracted entirely outside of California
nonresident partner or member.
reduced withholding rate if withholding is not
(such as reporting, receiving instructions,
Note: There are no provisions in the
required for one of the reasons listed in
accounting, etc., incidental to their duties
California R&TC to waive or reduce
General Information D, Exceptions to
outside of California), such activity will not
withholding for foreign (non-U.S.)
Withholding, or if you are a:
subject them to withholding requirements;
partners or members; and
• Foreign (non-U.S.) partner or member.
• The vendor/payee is a tax-exempt
• Other California source income paid to
There are no provisions in the California
organization under either California or
nonresidents.
Revenue and Taxation Code (R&TC) to
federal law (attach a completed Form 590
Compensation for services includes payments
waive or reduce withholding for foreign
to certify);
for services rendered in California, commis-
partners or members; or
• The vendor/payee receives a written
sions paid to salespersons or agents for
• Nonresident seller of California real
authorization from the FTB waiving the
orders received or sales made in California,
estate. Nonresident sellers of California
withholding;
fees for professional services rendered in
real estate should use Form 597-A,
• The domestic (nonforeign) nonresident
California, and payments to entertainers,
Nonresident Withholding Waiver Request
partner or member provides the partner-
wrestlers, boxers, etc., for performances in
for Real Estate Sales.
ship or LLC with a signed Form 590-P,
California.
Form 588 does not apply to payments for
Nonresident Withholding Exemption
When compensation is paid for services
wages to employees. Wage withholding is
Certificate for Previously Reported Income
performed both within and outside of
administered by the California Employment
of Partners and Members; or
California, the portion paid for services
Development Department (EDD). For more
• The income of nonresident partners or
rendered in California and subject to with-
information contact your local EDD office.
members, including a bank or corporation,
holding should be determined by an alloca-
is derived from qualified investment
B Law
tion. Refer to Form 587, Nonresident
securities of an investment partnership.
Withholding Allocation Worksheet.
The R&TC Section 18662 and the related
E When and Where to File
regulations require withholding of income or
D Exceptions to Withholding
franchise tax on certain payments made to
Submit your request for a waiver or reduced
Withholding is not required when:
nonresidents for income received from
rate as early as possible before making a
California sources. The withholding rate is 7%
• The payment is for goods;
payment in order to give the FTB time to
unless a reduced rate or a waiver is approved
• The payment is being made to a resident
process your request.
by the Franchise Tax Board (FTB).
of California, a corporation, a partnership,
Send Form 588 to:
or an LLC that has a permanent place of
C Income Subject to
business in California. Form 590,
NONRESIDENT VENDOR OR
Withholding
Withholding Exemption Certificate, can be
PARTNERSHIP WAIVERS
used by vendors/payees to certify that they
FRANCHISE TAX BOARD
The items of income subject to withholding
are residents of California or have a
PO BOX 651
include, but are not limited to:
permanent place of business in California.
SACRAMENTO CA 95812-0651
• Compensation for services performed in
Withholding agents should keep the
FAX (916) 845-4831 (24 hours a day)
California by nonresidents (including
signed form containing this certification
payment of expenses). For more informa-
F Miscellaneous Information
and provide it to the FTB upon request.
tion, get FTB Pub. 1023, Nonresident
Withholding agents are relieved of the
Upon granting a request, the FTB will issue a
Withholding — Independent Contractor,
withholding requirements if they rely in
withholding waiver. A withholding agent must
Rent and Royalty Guidelines, or
good faith on a signed certification
have received a withholding waiver authoriz-
FTB Pub. 1024, Nonresident Withholding
(Form 590) that the vendor/payee is a
ing a reduced rate or a waiver of withholding
— Entertainment Guidelines;
resident of California or has a permanent
before reducing or eliminating withholding on
• Rent paid to nonresidents if the rent is
place of business in California. If the
payments made to nonresidents. The
paid in the course of the withholding
resident, corporation, partnership, or LLC
withholding agent should retain the waiver for
agent’s business;
that has a permanent place of business in
a minimum of five years.
• Royalties paid to nonresidents for the right
California is acting as an agent for the
to use natural resources located in
actual vendor/payee, this exception does
Form 588 Instructions
Page 1
(REV. 1999)
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial